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Quote notes (#14)

ParaPunditcaptures America’s game of political chicken with exceptional acuity:

The sorts of people who can generate the incomes (and therefore tax revenues) to pay all these [pension] liabilities are becoming rarer. Of course this means the Republicans are road kill. But the demographic ascent of the Democrats into power will give them something like command of the Titanic as it hits an iceberg. In fact, the Democrats decided to head for the iceberg as their sure fire way to get permanent control of the ship.

This can’t be seen as a game of chicken however you turn it. It would be such if there existed an option where right-wingers surrender, whereupon leftists get to build an actual leftist utopia. But clearly, leftists know what they want and how to get it, and the right-wing opposition enters into the calculation only as a factor that slows them down somewhat — it’s not like the bad consequences of what leftists do are only because they’re colliding with the opposition.

However, more importantly, the main point of Parapundit’s metaphor is certainly correct, but it’s marred by the doom-mongering. “Hitting the iceberg” suggests some all-out cataclysm after which all bets are off. Yet he offers no argument why we should expect any social upheaval of such magnitude, even if all his claims are otherwise true. Things like state pension funds lacking money sure sound dramatic, but how exactly are they supposed to be fatal for the system?

It’s a very common sin among right-wingers nowadays. They’ll start with a jeremiad of true facts, and when the reader is justifiably upset and angry with these, they’ll offer predictions of disaster and doom — and while many readers will be disposed to take these predictions for granted in their unnerved state of mind, a dispassionate analysis would show that the implications of the mentioned facts, however unnerving, still fall far short of any game-changing cataclysm.

This is is exactly right: Right-wingers are always warning of imminent collapse and hyperinflation. But they have it wrong. CPI is roughly 1.5%. The 10-year Treasury is about 2.5%. These are near to the lowest readings in decades.

What the doom-mongers miss is that monetary policy can cover for mediocre fiscal policy — and actually US fiscal policy isn’t all that bad anyway (relative to the rest of the world). That’s why so many people want to come here.

Let’s say we have continued demographic dysgenia. How long would it take til we have the demographics of Mexico? 200 years? And Mexico has been getting better and better lately anyway.

So … I think the more likely scenario is some sort of “closing of the IQ arbitrage” between poor countries where smart women still have babies (Russia, Pakistan) and rich countries like the US where they don’t. In fifty years perhaps the average Pakistani will have the same IQ as the average American. Perhaps Russia will become an economic powerhouse. Perhaps Ukraine will become a nice country. (It already looks pretty nice — it’s just run by morons.)

I’m not asserting dogmatically that a game-changing collapse will not happen. Rather, I’m criticizing people who assert nonchalantly, as something too obvious to need any supporting argument, that such a collapse will follow in the foreseeable future as a straightforward extrapolation of the current economic, demographic, and other trends.

We can of course discuss how likely such a collapse is, and how exactly its mechanism might look like. It may well be that my estimate of this probability is biased and too low. However, this has to be a complex and careful discussion, not a simple litany of troubles that is apt to make the catastrophist conclusion emotionally appealing, while in fact it’s a complete non sequitur. The latter approach is a blind alley that will not move us one inch closer to any real insight.

(And how is it justified to take Detroit as an “iceberg” for the whole system? As horrible as it is, it’s still just a local problem far from any nerve centers of the system — and as demonstrated in other places such as New York or DC, the present regime is quite capable of reversing the same process of local decay whenever its elites are actually inconvenienced by it. Of course, you may argue that these neglected local gangrenous sores are likely to lead to fatal blood poisoning for the whole system, or that they are just local manifestations of a general lethal malady — but again, here we face a complex and difficult diagnostical problem, where hit-and-run catastrophist argumentation of the above described sort can only damage our understanding.)

I think this discussion is already happening, and that people are re-examining their expectations. It’s a topic I’ve tried to explore skeptically for a while. The more your agenda for further, rigorous examination of these matters is pursued, the happier I’ll be.

(I’m not suggesting that Detroit is an Iceberg “for the whole system” — just that the sight of a city hitting an iceberg puts the more extreme anti-catastrophist arguments into question.)